Defrauded Russian homebuyers demand compensation

Thousands of Russian homebuyers who lost their life savings in property scams are demanding compensation from the government.

Homebuyers claiming to represent 200,000 families across the country who fell victim to the scams wrote to the president this week demanding that the government ensures they get either flats or cash refunds, and calling for stronger oversight of the construction industry.

"Having paid for apartments, we have no place to live, because of flawed legislation in the field of housing construction and land ownership, corruption, bureaucracy and the criminal negligence of officials and law enforcement bodies," the letter read.

The homebuyers say they were defrauded by construction companies that promised customers affordable new housing in Moscow and other cities. After accepting partial or full payments in cash for the flats - common practice in the Russian housing market - the firms never built the apartments or sold them to multiple buyers.

One Moscow construction company, Sotsialnaya Initsiativa, is reported to have collected more than £265m throughout Russia in the scam. The company's former director, Nikolai Karasyov, was arrested and charged with fraud in January.

"I lost everything, all my savings, and now I have to live in a small room in a shared flat," said Irina Osipovich, 50, who four years ago paid £8,000 - a large sum in a country with an average monthly wage of only £200 - for a flat that was given to someone else after she refused to pay an additional £3,000 demanded by the construction firm.

"I didn't have any more money to give them. I tried taking the company to court, but nothing happened," she said.

In a rare show of public defiance for Russia, the defrauded homebuyers have organised a series of anti-government demonstrations. Last Friday more than 1,000 protesters rallied outside Moscow's White House, which houses government offices. About 50 protesters tried to set up a camp at the rally but were dispersed by riot police. Another protest is planned.

"We're being told that Russia is in a demographic crisis, that women need to have more children, but how are we supposed to do that when we haven't got anywhere to live?" asked Anastasia Antonycheva, a spokeswoman for the homebuyers whose family paid £26,000 three years ago for a flat that was never built. President Vladimir Putin called during his recent state of the nation address for Russians to have more babies.